Baroness Scott of Needham Market: rose to call attention to the environmental and social consequences of the Government's house-building programme; and to move for Papers.
	My Lords, housing is one of the key issues facing the Government. I am delighted that we have such a long list of distinguished speakers to participate in today's debate, and that we will finish in time to go along and hear the results of the other important piece of parliamentary business going on today. As the opening speaker, I would like to draw a broad canvas on which other noble Lords can bring their interests and expertise to bear. I am sure that what we hear today will give us all much food for thought.
	According to the IPPR, there are 120,000 homeless households nationally. Shelter estimates that 110,000 children are living in temporary accommodation. When you add to that the misery of the overcrowding which is a fact of life for many, the substandard accommodation which is a reality for many more families, and the financial problems of people who pay higher housing costs than they can reasonably afford to meet, the scale of the problem becomes evident. We know that the problems that face society today are multiple and complex, but poor housing is one the fundamentals that leads to social exclusion, deprivation and poor life chances. One might think that the problem was that we had a shortage of housing in this country. However, analysis of the 2001 census has shown that there are in fact 3.7 million more dwellings in this country than there are households. We do not have too few houses but too many in the wrong place, at the wrong price and in the wrong condition.
	There has of course been a home ownership revolution in the past 30 years, universally acknowledged as a welcome development. But as the Government's own figures show, while in 1988 half of all households could afford to buy their own home, now only 37 per cent can do so. Since 1997 salaries have risen by 18 per cent while house prices have gone up 125 per cent. When I bought my first home almost 25 years ago, there was much debate about whether lenders were wise to offer mortgages three times the household salary. Now the house price to earnings ratio in the south-west is 9.5:1. In parts of my home region of East Anglia, there are hot spots where the ratio is 11:1. Talk is often centred on property prices in London and the south-east, but the problem extends to hot spots throughout the United Kingdom. It is becoming more and more difficult for young people to get a foot on the housing ladder, and I shudder to think how much more difficult it will be for graduates when they emerge from university with large personal debts before they even contemplate getting mortgages. And it is not exclusively a young person's problem. Something like 550,000 over-65s are still paying off mortgages, because of either over-commitments early on or endowment shortfalls.
	I recently had the experience of reading the ODPM consultation document Planning for Housing Provision. The kindest thing that I can say about it is that it is without doubt the worst document of its kind that I have ever read, and the competition is fairly fierce. You do not have to take my word for it as, last Friday, Simon Jenkins described it as,
	"a disgrace to the English language and the British civil service",
	and "Airhead Blairism". It certainly falls into the trap of confusing market demand for housing with genuine housing need. The danger of such a simplistic approach of providing market housing is that it tends to provide more and larger houses for those already well housed, but no real benefit to people in genuine housing need.
	The social and demographic changes which have increased demand for housing are well known. People are living longer and independently, families are breaking up, and there is an increase in the number of single people of all ages. The flexible job market in which we take such a pride has a number of effects, as the average stay in a job is reduced now to three years, and people need housing mobility. Second homes are now no longer the preserve of the very wealthy, and it is estimated that there are about 250,000 of them.
	In some rural areas, the entire fabric of the community has been altered by the presence of large numbers of second homes. In the village of East Portlemouth in the Devon district of South Hams, 60 per cent of the properties are holiday homes, as are 45 per cent of those in Salcombe. At the other end of the spectrum, the estate agents, Savills, has identified a growing trend towards city-centre pieds-à-terre. A response to what is seen as the poor quality of life in cities is to locate the main family home elsewhere and to live in the city during the week. Savills estimates that 25 per cent of the houses in Kensington and Chelsea are second homes.
	The buy-to-let phenomenon looks set to grow, according to market analysts. The introduction of self-invested pensions next year will provide a boost to that, although the Council of Mortgage Lenders is saying that the industry does not believe that the Government have done enough to warn people about the pros and cons of putting residential properties into personal pensions.
	So the question facing the Government is not just that of absolute numbers of houses but of their genuine affordability, and there are a number of ways in which that might be addressed. We are still waiting for the Government's detailed response to the Barker review, but on these Benches we are unconvinced by the proposition that house price levels should be used as the main determinant of planning policy. The IPPR suggests that the Barker methodology is simply not sufficiently robust to identify whether an increase in the level of house building, as proposed by the Government, would do anything significantly to reduce house prices. It goes on to say that it is the macro-economic backdrop, such as inflation, interest rates and tax regimes, and not the amount of building which significantly alters house price levels. Indeed, as only one in 10 of all house sales involves a new build, massive increases in the number of houses built would be needed to affect the market.
	The CPRE also fundamentally disagrees with Barker, arguing that, were house prices to rise above the average in a particular area, local authorities would be forced to abandon environment and infrastructure considerations because they would be under pressure to bring more land on stream. I do not know a single planning expert who believes that building more houses is, by itself, the way to make housing more affordable.
	Of course, the Government face a further conundrum. If they tried to manage house prices by increasing demand, that would have a devastating impact on the majority who are already home owners. We know that there are high levels of personal debt among those already in the market, sustained in the main by the comfort blanket of rising house prices.
	Government policy with regard to affordable housing is very much focused on home ownership. In a recent speech, David Miliband reiterated the Government's ambition further to increase the levels of home ownership. But the Government have to think hard about how high it is practically possible to aim in this regard. It will require an increasing amount of government subsidy to push home ownership beyond a certain point, and it must be asked whether the money would not be better invested in alternative forms of tenure. Recent research by the Joseph Rowntree Foundation has shown that 1.25 million families are neither able to afford to buy the cheapest properties in their area nor are they poor enough to qualify for housing benefit. It is for those people that the socially rented sector traditionally came into play.
	It is certainly true that most people aspire to own their own home. But that is at least in part because the alternatives are so dire. The socially rented sector is scarce, and in the private sector accommodation is expensive and insecure. Over the past two decades, while house building for purchase has remained static, there has been a dramatic fall in the number of properties for rent. In 1985, 25,000 homes were built in the socially rented sector. That was down to 14,000 in 2003. Against that, last year alone, 67,000 houses were lost through the right to buy. The housing waiting list has gone up by 38 per cent since 2000.
	Britain is unusual among European nations in that it has very low levels of institutional investment in the rented sector. Most private rented homes here belong to individual landlords. They manage very few properties and have a small capital base. Both Barker and, before her, the Rogers report, recommended taxation and regulatory change to enable institutional investment in property. Perhaps the Minister could say a little more about whether there are proposals for estate investment trusts along the US model.
	The demographic changes to which I referred earlier have led to an 18 per cent growth in the number of people living in rented accommodation. For the majority, the preference would be for security of tenure with a local authority or housing association. Those organisations can certainly cater for a broader range of tenant and, more importantly, can invest in a wider range of neighbourhood services. They have a track record of taking the lead in regeneration and renewal projects. I know that we will hear more about this aspect of sustainable community development from my noble friend Lady Falkner when she replies to the debate.
	Can the Minister say why the Government are so determined to press on with their policy of removing council houses from local authority control? Ballots all over the country have shown that people have an overwhelming preference to remain as council tenants, even given the fact that the playing field is now so unlevel in terms of regulations and economic options. For a Government so committed to the choice agenda, why are they so determined not to allow council house tenants the freedom to choose?
	Whatever the form of tenure, we need to consider the planning system. A recent piece of academic research reported in a Policy Exchange magazine asserts that it is the centralised system of planning in England which is restricting the supply of new land for housing. Countries such as Australia and Ireland, which have similar centralised planning systems, are also suffering from housing shortages. In countries such as Germany and Switzerland with more devolved systems, land is often developed more speedily because local planners have to engage with their local communities at an early stage. They are not attempting to impose unwanted development, and therefore the development is more welcome when it comes along.
	Great strides have been made in urban development and the use of brownfield land, but we still have a long way to go. Cities are often seen as places to work and shop rather than where people aspire to live. The Government's figures issued last week show that there are some 700,000 empty properties in the UK and many hundreds of thousands more above shops. The tax regime still favours new build over repair and renovation, and I hope that the Government will seriously consider whether this is the right policy message.
	The house-building programme will have a significant environmental impact, and I hope that we will hear more of this from other noble Lords. In the Thames Gateway flooding is a particular risk, while in the south-east it is water supply which is problematic. The Royal Institution of Chartered Surveyors is calling on the Government to demonstrate their commitment to funding the necessary remedial measures.
	The Government aim to reduce CO2 emissions to 60 per cent of 2003 levels by 2050. By then, we will have something like 9 million extra houses if they all go ahead as planned. Much tougher and better enforced building regulations will be needed if the CO2 targets are to be met. But the environment Select Committee in another place has said that there is little evidence of the energy efficiency standards of the building regulations being met.
	My noble friend Lord Bradshaw will talk more about the transport impacts of the house-building programme, and so I need say little more here except to flag up that in the key growth area, such as the Thames Gateway, the programme will stall if the transport needs are not met, and met soon. There is no evidence yet that the Government have a coherent view on how these projects are to be funded. In my own region in the east of England, the regional planning authority has withdrawn its own housing plan because of lack of government investment in infrastructure.
	Local authorities are becoming much better at dealing with that within the limited means at their disposal. In Liberal Democrat-controlled Milton Keynes, a partnership between the council, English Partnerships and developers is generating a "roof tax" amounting to some £18,000 per house. This comes from developers and will be used to cover the cost of necessary infrastructure.
	The decisions made by the Government at all levels in the near future will impact on all of us, whether the issue is demolition of properties in northern cities, protection of the countryside or urban regeneration or involves sustaining local communities in attractive areas. I very much look forward to hearing the contributions of all noble Lords today, including the response of the Minister, which I know will give us much food for thought. I beg to move for Papers.

Lord Cameron of Dillington: My Lords, I too will touch on the subject of affordable rural housing. I have three points to make. First, the social consequences of doing nothing about the rural housing crisis would be serious. We are beginning to create unbalanced communities. If you are rich, you live in the countryside; if poor, you live in the towns. That does neither towns nor villages any favours at all.
	In my part of the world, in Somerset, we are becoming a haven for the retired. People who are moving in, usually from the south-east, are prepared to pay almost anything for a small cottage in a village. Younger local people—who are, after all, the active members of our village communities, and who are the workers our local businesses depend upon—cannot get a look in. In fact, our young are leaving the county in droves. Key workers, particularly health and social care workers, who will of course be needed more and more to look after the ageing retired population, cannot earn the wages to stay in the countryside. We have not yet seen the nadir of the social consequences of this problem, either for the countryside or for the towns.
	Secondly, the environmental consequences of adding 9,000 to 10,000 new affordable rural homes per year for the next decade would be negligible. Provided that they are added as small developments to each and every community, it amounts to an average of just over one house every two years in each parish in England over the 10-year period. The crucial factor, however, is that these houses must remain in the affordable sector in perpetuity. The right to buy has had devastating consequences in rural England, and to leave it in place—or, worse still, to consider extending its provisions—while this crisis exists is like trying to run a bath while leaving the plug out.
	It does not matter whether these houses involve some form of equity holding or are merely rented. Personally, I believe that the uniquely British emphasis on home ownership is largely overdone. The main point is that tomorrow's young and active generations, trying to live on the lower-than-average rural wages, would have the opportunity to stay in their community and provide a social network and support—and this is very important—for family and friends, who might be ill, old or young—a service that is so expensive if government alone is left to deliver these services. Sustainable communities are made up of sustainable networks. Sustainability is not all about CO2 .
	Thirdly, various groups are now looking at this problem. The Joseph Rowntree Foundation has a small group, including various Members of your Lordships' House, that is carrying out a short investigation into solutions. The new Commission for Rural Communities, though not yet statutorily in place, is doing an in-depth countryside analysis, listening to views of people on the ground in every region. Above all of this, pulling it all together, is the new Affordable Rural Housing Commission, chaired by Elinor Goodman, which is due to report to the Government next spring. At that stage, we will have done consultation to the death, and the time for action will be upon us.
	This is a problem that has been hanging over rural Britain since the second half of the 1980s—dare I say it, since not long after the right to buy was introduced. I cannot emphasise enough the social and economic consequences for both rural and urban Britain if we do not deal with the issue properly this time around. The Affordable Rural Housing Commission must come up with some practical solutions. These will have to involve incentives for every local authority, housing agency, local and national charity, perhaps every financial institution, and every landowner, housing association, RSL and parish, to encourage them actively and financially to utilise all the resources at their disposal and pull together to solve this problem.
	The essential tool in this process of pulling together is the Rural Housing Enablers. They are crucial people, and they must remain properly funded. I hope the Minister will give me some commitment on that. Unless these bodies are actively encouraged to pull together, we will never resolve the number one problem for our rural communities in this country.